Economy

Brazil Real Rises as Petrobras Board to Review Financial Results

Brazil’s real climbed for the first time in four days as state-controlled oil producer Petroleo Brasileiro SA indicated that it was moving closer to publishing financial results.

Bloomberg Business
14/04/2015 17:14
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Brazil’s real climbed for the first time in four days as state-controlled oil producer Petroleo Brasileiro SA indicated that it was moving closer to publishing financial results.

 

The currency added 1.5 percent to 3.0762 per dollar at 12:30 p.m. in Sao Paulo a day after falling the most in two weeks. One-month implied volatility on options for the real, reflecting projected shifts in the exchange rate, was the highest among 16 major currencies tracked by Bloomberg.

 

The real rose as Petrobras said it will present third-quarter and 2014 results at an April 22 board meeting and release the information after approval. While Brazilians took to the streets Sunday to protest the corruption scandal at the oil company as well as government austerity measures, the turnout was smaller than for demonstrations held last month. 

 

“News that Petrobras’s audited results may come out as early as April 22 takes the pressure off the real,” Joao Paulo de Gracia Correa, a currency trader at Correparti Corretora de Cambio in Curitiba, Brazil, said in a research note to clients.

 

The real has gained 3.8 percent this month, partly benefiting from an agreement by party leaders in Brazil’s ruling coalition to support the government’s plan to trim budget deficits.

 

Inflation Outlook

 

Swap rates on the contract maturing in January 2017, a gauge of expectations for changes in Brazil’s borrowing costs, declined 0.10 percentage point to 12.97 percent, the lowest level since March 3.

 

It’s “feasible” for inflation to converge to the 4.5 percent target in 2016, Tony Volpon, who has been nominated as Brazil’s central bank international affairs director, said at a Senate committee hearing.

 

The median forecast of 100 analysts surveyed by the central bank is for inflation to end this year at 8.13 percent, faster than the preferred range of 2.5 percent to 6.5 percent. Last month, policy makers lifted the benchmark lending rate to a six-year high of 12.75 percent to curb increases in consumer prices.

 

The central bank extended the maturity of currency swap contracts worth $517.6 million Tuesday. Brazil halted at the end of March the sale of the swaps, which supported the real and limited import price increases.

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